National Labor Relations Board, Washington, D.C. (Agency) and National Labor Relations Board Union (Union)

[ v61 p154 ]

61 FLRA No. 31

NATIONAL LABOR
RELATIONS BOARD
WASHINGTON, D.C.
(Agency)

and

NATIONAL LABOR
RELATIONS BOARD UNION
(Union)

0-AR-3915

_____

DECISION

August 11, 2005

_____

Before the Authority: Dale Cabaniss, Chairman, and
Carol Waller Pope and Tony Armendariz, Members [n1] 

I.      Statement of the Case

      This matter is before the Authority on exceptions to an award of Arbitrator Robert T. Simmelkjaer filed by the Agency under § 7122(a) of the Federal Service Labor-Management Relations Statute (the Statute) and part 2425 of the Authority's Regulations. The Union filed an opposition to the Agency's exceptions.

      The Arbitrator sustained a grievance alleging that the Agency's decision to suspend employees' contract benefits and performance awards violated the parties' collective bargaining agreement.

      For the reasons that follow, we deny the exceptions.

II.      Background  [n2] 

      The Union, representing two field units, filed a grievance alleging that the Agency violated the parties' master agreement when it delayed the payment of contractual benefits and performance cash awards. [n3]  The Arbitrator framed the issues as follows:

(1) Did the Agency violate the contracts [Art. 3, Sec.9; Art. 4, Sec. 7; Art. 7; Art. 11; and Art. 12 of the contracts for professional and support staff field employees] by delaying the restoration of benefits provided in Articles 7, 11 and 12 until on or about March 18, 2003, during the fiscal year 2003 and beyond the enactment of the Agency's appropriations bill?
(2) Did the Agency violate the contracts [Art. 3, Sec. 9; Art. 4, Sec. 7; and Art. 12 of the contracts for professional and support staff field employees] by further deferring the payment of performance cash awards under Article 12 beyond the enactment of the Agency's appropriations bill and until July 9, 2003?

Award at 3.

      The Arbitrator determined that as of October 1, 2002, the National Labor Relations Board (NLRB) began the 2003 budget year operating under a continuing resolution (CR). The CR, which froze the NLRB's budget to that of the previous year's level, lasted until February 20, 2003, when the President signed into law the Omnibus Appropriation Act for fiscal year 2003. Id. at 8. Under the terms of that Act, the NLRB had a budget increase of roughly five percent. Id. Shortly thereafter, the Agency began to draft an operating plan setting forth how it would budget the appropriated money.                                             

      On March 5, 2003, the Acting General Counsel of the NLRB issued a memorandum advising that the Office of Management and Budget had cautioned the NLRB that it could be subject to a recission of as much of one percent of its budget to help cover military costs associated with military operations in Iraq and Afghanistan. Id. at 9. As such, the Acting General Counsel stated that performance awards for all levels of staff would be deferred until later in the year. Id. In this respect, the Acting General Counsel also directed Regional Managers "not to sign or forward performance award papers to headquarters." Id. at 50. This was reiterated by another Agency official who stated "Regional Management should not, at the time that an employee's appraisal is issued, inform the individual that he or she has been nominated or approved for an award." Id. at 48. [ v61 p155 ]

      Under the terms of the agreement, while the NLRB was operating under a CR, contract benefits such as the education/training and the Washington Exchange Program along with performance awards, could be deferred. Id. at 10. The Arbitrator, however, also noted that under the parties' contract the restoration of such benefits would occur upon "enactment of the Agency's annual appropriation" unless to do so would "seriously impair the Agency's ability effectively to achieve the mission and goals of the National Labor Relations Act." Id. The Arbitrator noted that the Agency never invoked a claim that it would be seriously impaired if it restored benefits after the CR concluded. Id. at 44.

      The Agency's deferral of performance awards continued until July 9, 2003. Id. at 11. The Agency did, however, fund the Washington Exchange Program (a contract benefit) for May, June and July of 2003. Id. at 12. Moreover, the Agency funded training benefits under Article 7 as of March 21, 2003. Id. at 12.

      After considering the above, the Arbitrator determined that the Agency violated Article 3, Section 9; Article 4, Section 7; Article 7; Article 11 and Article 12 when it delayed for 26 days restoring benefits that were provided under Article 7, 11 and 12. [n4]  Id. at 41, 47. In this respect, the Arbitrator found that under Article 3, Section 9, benefits deferred under a continuing resolution will be retroactively restored "[u]pon enactment of the Agency's appropriation, absent a determination by the General Counsel that such benefits will be curtailed under the above `seriously impaired' standard[.]" Id. at 41-42. As such, the Arbitrator determined that "once the Omnibus Appropriations Bill was enacted on February 20, 2003, only one `escape hatch' remained for deferring benefits and that was a `seriously impaired' determination by the General Counsel" and that the funding of these benefits was not contingent on the Agency's ability to prepare an Operating Plan or obtaining apportionment authority from the Office of Management and Budget. Id. at 43. He further stated, "[h]aving elected not to invoke the `seriously impaired' option set forth in Article 3, Section 9, yet deciding to continue the deferral of benefits past February 20, 2003, the Agency, as the Union has correctly observed, generated a third option which had no contractual bases and thus committed a contract violation [.]" Id. at 44. Accordingly, the Arbitrator determined that the contract benefits and awards should have been restored immediately after the enactment of the Agency's appropriation. Id. at 42.

      With respect to the second issue, deferral of performance awards, the Arbitrator again found that the Agency violated the parties' agreement when it deferred payment of such awards until July 9, 2003 (4½ months later). Id. at 48, 52. In reaching this conclusion, the Arbitrator relied on Article 3, Section 9 and Article 12, and found that the Agency never indicated that it would be "seriously impaired" if it were to issue performance awards. Id. at 48, 51. The Arbitrator concluded, "[i]n effect, the Agency undermined the language of Article 12 which memorialized a procedure wherein employees who were identified at the time of their performance appraisal as meriting a performance award would have their entitlement to that award effectuated shortly thereafter by the written determination of the Regional Director." Id. at 50. As such, even though the Arbitrator acknowledged that some delay may exist between the time a "performance appraisal is conducted and the time the award is approved by the Regional Director . . . the 4 ½ month delay imposed by the Agency was a decision which had no support in the contract language." Id. at 52.

      In addition to finding the above contract violations, the Arbitrator determined that "a case-by-case analysis of the regions with respect to their practice in issuing [performance] awards would be necessary to determine which employees were financially harmed by the continued deferral until July 9, 2003." Id. at 55. In reaching this conclusion, the Arbitrator rejected the Union's contention that an Agency-wide past practice existed which paid employees performance awards near the time of their performance appraisals.

      The Arbitrator also rejected the Agency's assertion that the Union's interpretation of Article 3, Section 9; Article 4, Section 7 and Article 12 of the parties' agreement excessively interfered with the Agency's right to determine its budget. In this respect, the Arbitrator determined that the interpretation of the contract merely compels the Agency to fund programs for which it has already set funds aside. Id. at 56.

As a remedy, the Arbitrator determined:
The Arbitrator finds that those employees whose performance cash awards or incentive awards under Article 12 were deferred from February 20th until July 9, 2003 are entitled to a make whole remedy, including interest. The employees whose performance appraisals fell between February 20 and July 9, 2003 and were rated "fully successful" or higher in all critical elements are directly affected. Similarly, these employees who received ratings of "outstanding" [ v61 p156 ] and were eligible for a quality step increase (QSI) during the February 20 through July 9, 2003 period are entitled to make whole remedy, including interest.

Id. at 57.

      Finally, the Arbitrator denied the Union's request for employee compensation under Article 7 and Article 11. Id.

III.     Positions of the Parties

A.     Agency's Exceptions

1.     The Deferral of Contract Benefits

     a.     The Award Violates the Antideficiency Act

      The Agency argues that it is illegal under the Antideficiency Act for an agency to "overobligate[] or overspend[]" an appropriation or apportionment. Exceptions at 11 (citing 31 U.S.C. §§ 1341; 1517). It argues that consistent with this requirement in the Act, an Agency must have its appropriation apportioned "to prevent obligation or expenditure at a rate that would indicate a necessity for a deficiency or supplemental appropriation for the period." Id. (quoting 31 U.S.C § 1512(a)). Under this process, it argues that it must first construct an operating plan, must then submit an SF-132 based on the operating plan to the Office of Management and Budget (OMB), and must receive final approval of the SF-132 from OMB. Id. at 11-13. It contends that it may "obligate an enacted appropriation only after OMB has apportioned it to the Agency." Id. at 12 (citing Apportionment of Budget Authority for America West Airlines, B-290600 (July 10, 2002). As such, it argues that to the extent the Arbitrator found that it violated Article 7, 11 and 12, Section 3 "by not restoring contractual benefits and awards upon enactment of its appropriation," the award is "without merit and conflicts with the statutory and regulatory scheme described above[.]" Id. at 13.

      Finally, the Agency also cites to Article 3, Section 1, which reads in pertinent part, "[i]n the administration of all matters covered by this Agreement, officials and employees are governed by existing and future law; governmentwide [sic] rule and regulation[.]" Exceptions at 13. As such, it states that the Arbitrator's interpretation of Article 3, Section 9 is not only contrary to law, but also, because it is contrary to law it violates the parties' agreement. Id.

     b.     The Award Fails to Draw Its Essence From the Parties' Agreement

      The Agency argues that "[c]ommon sense dictates and a fair reading of the parties' Agreement compels the view that the parties did not intend that the deferred contractual benefits would be restored at the exact moment or immediately after the appropriation was enacted." Exceptions at 14. It contends that the contract allows time for the General Counsel to invoke a "seriously impaired" standard which cannot be done immediately after an appropriation is approved. Id. at 15. As such, it argues that the award fails to draw its essence from Article 3, Section 9, to the extent that the Arbitrator found, "[u]pon enactment of the Agency's annual appropriation, absent a determination by the General Counsel that such deferred benefits will be curtailed under the above `seriously impaired' standard, the deferred benefits will be retroactively restored to the greatest extent possible, consistent with law." Id. at 14.

2.     The Deferral of Employee Performance Awards

     a.     The Award Violates the Antideficiency Act

      The Agency claims that "the heads of Federal agencies are required to take steps to avoid any drastic curtailment of Agency operations." Exceptions at 21 (citing Office of Legal Counsel, Department of Justice, USMS Obligations to Take Steps to Avoid Anticipated Appropriations Deficiency, May 11, 1999). In this respect, the Agency argues that the Antideficiency Act "evinces a general intent on the part of Congress to curb levels of agency spending `that would indicate a necessity for a deficiency or supplemental appropriation." Id. It argues that it acted within the scope of the Antideficiency Act when it made a budget decision not to fund performance awards until after the threat of a recission had dissipated. Id. at 21-22.

      Additionally, the Agency argues that the Antideficiency Act allows for an agency to make contingencies. 31 U.S.C § 1512(c). Accordingly, it argues that to the extent it was denied the right to set aside the performance award money until a decision on the recission was rendered, the award's preclusion on its ability to exercise discretion is contrary to 31 U.S.C § 1512(c)(1)(A).

      Moreover, the Agency contends that the award is contrary to its Administrative Policies and Procedural Manual regarding Employee Recognition Program (ERP), Section 12(a)(1), which implements 5 C.F.R. § 451.103(c). Under 5 C.F.R § 451.103(c) the Agency contends "`[a]n agency award program shall provide for - [o]bligating funds consistent with applicable agency [ v61 p157 ] financial management controls and delegations of authority." Exceptions at 23. As such, the Agency argues that the Arbitrator's determination that the Agency must fund performance awards immediately after appropriation is contrary to both the ERP and 5 C.F.R. § 451.103(c)(1). Id.

     b.     The Award Excessively Interferes With Management's Right to Assign Work

      The Agency contends that the Arbitrator interpreted Article 12, Sections 3(b)(1) and 3(b)(2) as limiting the Acting General Counsel from directing regional managers to refrain from signing or forwarding performance awards to headquarters. Exceptions at 25. As such, it argues that the Authority has held that "proposals that either require an employee's supervisor to perform certain duties, or preclude that supervisor from performing certain duties, affect management's right to assign work." Id. (citing NAGE, Local R1-100, 56 FLRA 268, 272 (2000)). Moreover, as the Agency contends that the provisions do not constitute either procedures or appropriate arrangements, it argues that the award fails to satisfy prong I under United States Department of the Treasury, Bureau of Engraving and Printing, Washington, D.C., 53 FLRA 146 (1997) (BEP). Id. at 26.

     c.     The Award Excessively Interferes With the Agency's Right to Determine Its Budget

      The Agency contends that the award is contrary to law "because it directs the Agency to take budget actions in future fiscal years with respect to funding the award pool and granting performance awards to bargaining unit employees." Id. at 26. As such, the Agency contends that the award excessively interferes with its right to determine its budget. Citing Red River, 52 FLRA 132, 135 (1996). In this respect, it states that the award will require it to fund certain line items in its operating plan. Id. at 26-27.

     d.     The Award Fails to Draw Its Essence From the Parties' Agreement

      The Agency argues that the Arbitrator's finding that awards should be awarded as "expeditiously as possible" under Article 12, Section (3)(b)(1), has no bearing on performance awards because that section applies only to incentive awards. Exceptions at 34. Rather, it contends that Article 12 section (3)(b)(2), not (3)(b)(1), applies to performance awards, and that section has no time frame in which performance awards must be granted. Id. at 29. Accordingly, the Agency contends that the correct standard the Arbitrator should have applied is "a reasonable period of time" and that it acted reasonably in delaying awards because of the possible recission. Id. at 35 (citing Article 12, Section 3(c)).

     e.     The Award is Contrary to the Back Pay Act

      The Agency claims that there is no unjustified or unwarranted personnel action where the performance awards are completely discretionary. Id. at 31 (citing United States Dep't of Health and Human Services, Social Security Admin. Area II, New York Region, 48 FLRA 370, 378 (1993) (Area II)). As such, it argues that there is no precedent allowing a union to receive interest on back pay when the Agency maintains discretion over making such an award. Id. at 29-30 (citing Matter of: Interest on Late Payments of Mandatory Employee Incentive Awards, 70 Comp. Gen. 711 (1991)).

      Finally, the Agency contends that even if a past practice did exist in some field offices to award employees close to the time of their appraisals, such practice is undermined by the discretion the Agency retains in the parties' agreement. Id. at 33, (citing Article 26 (local agreements may not conflict with or modify the national agreement)). As such, it claims that it can distribute performance awards at any point during the fiscal year without breaching the parties' agreement.

B.     Union's Opposition                    

1.     The Deferral of Contract Benefits

      a.     The Antideficiency Act

      The Union contends that the Agency's "argument has no legal or factual basis" as it has never advocated that the Agency exceed its appropriated funding, nor did the Arbitrator's award result in such an action. Opposition at 13. Moreover, the Union argues that the Agency retains discretion to shift money from one fund to another in order to comply with the Antideficiency Act. Id. As such, the Union reiterates that the Agency's argument has no "rational basis or merit." Id. at 14.

     b.     Essence

      With respect to the Agency's essence claim, the Union argues that the Agency merely disagrees with the Arbitrator's interpretation of Article 3, Section 9. Opposition at 14. In this respect, the Union notes that the parties negotiated this provision knowing that its implementation may be difficult. Id. Therefore, the Union argues that this exception is a mere attempt by the Agency to renegotiate different language. Id. at 15. [ v61 p158 ]

2.     The Deferral of Employee Performance Awards

     a.     The Antideficiency Act

      The Union contends that the Agency's "argument has no legal or factual basis" as it has never advocated that the Agency exceed its appropriated funding, nor did the Arbitrator's award result in such an action. Opposition at 13. Moreover, the Union argues that the Agency retains discretion to shift money from one fund to another in order to comply with the Antideficiency Act. Id. As such, the Union reiterates that the Agency's argument has no "rational basis or merit." Id. at 14.

      Additionally, the Union argues that to the extent the Agency is contending that the Arbitrator's award precludes the Agency from acting in an "emergency" under § 7106(a)(2)(D), this case does not encompass an emergency within § 7106(a)(2)(D). Id. at 8 (citing NAGE, Local R7-23, 23 FLRA 753, 756 (1986)).

     b.     Assignment of Work

      The Union argues that the General Counsel's directive to order managers to refrain from processing performance awards violated the contract and, therefore, does not constitute an assignment of work. Opposition at 12. Moreover, the Union contends that the award does not interfere with management's discretion to determine which employees are deserving of awards. Id.

     c.     Right to Determine Budget

      The Union argues that under the Authority's holding in NAGE, Local R14-52, 48 FLRA 1198 (1993), "an issue relating to conditions of employment that could result in a cost to an agency does not equate to the `inclusion of a program, operation, or amount in the budget' within the meaning of . . . Wright-Patterson[.]" Opposition at 10. In this respect, it contends that the Arbitrator's award does not result in a managerial right being affected because the parties' have already agreed through the contract, subject to budgeting out language in Article 3, Section 9, as to how to deal with post appropriation implementation of funding. Id. at 11. Moreover, the Union argues that the award "in no way mandates that new benefits be created or implemented. Rather, the award . . . does not allow for an indefinite deferral of awards, training benefits or exchange program benefits[.]" Id.

     d.     Essence

      The Union argues that the Agency is merely disagreeing with the Arbitrator's interpretation of the parties' agreement. Opposition at 17, citing United States Dep't of Labor (OSHA), 34 FLRA 573, 575-76 (1990)(DOL). Additionally, the Union claims that the Agency is offering "unsupported representations of the parties' past practice and interpretation of the temporal standards under Article 12, Section 3." In this respect, the Union states that this is newly presented evidence that should be barred from Authority consideration under 5 C.F.R § 2429.5. Opposition at 17.

           e.     The Back Pay Act

      The Union argues that performance awards such as a quality step increases were not discretionary for employees who received "outstanding" ratings. Opposition at 15. As such, it argues that the Agency's arguments pertaining to Area II are misplaced as, consistent with that decision, an unjustified or unwarranted personnel practice exists under these circumstances. Id.

      Moreover, the Union contends that the only reason that some employees were not "entitled" to performance awards was because, as the Arbitrator found, the Agency had directed regional managers to withhold processing awards. Id. at 16. It also argues that "the Agency would not have proposed and bargained for language permitting the deferral of awards during continuing resolutions if the awards program was discretionary in the first place." Id. at 15. Finally, it contends that the Agency maintains its ability to determine who should receive awards and, as such, the award does not infringe upon management's discretion. Id. at 16.

IV.     Analysis and Conclusions

A.     The Deferral of Contract Benefits

1.     The Award is Not Contrary to Law

      When a party's exception challenges an arbitration award's consistency with law, rule, or regulation, the Authority reviews the questions of law raised in the exception and the arbitrator's award de novo. See NFFE, Local 1437, 53 FLRA 1703, 1709 (1998). When applying a de novo standard of review, the Authority assesses whether an arbitrator's legal conclusions are consistent with the applicable standard of law, based on the underlying factual findings. Id. at 1710. In making that assessment, the Authority defers to the arbitrator's factual findings. See NTEU, Chapter 50, 54 FLRA 250, 253 (1998).

      Here, the Agency argues that in the absence of an approved apportionment it cannot obligate money without violating the Antideficiency Act. For the following reasons, we reject this argument. [ v61 p159 ]

      The Antideficiency Act precludes an agency from expending funds: (1) in excess of those appropriated for the fiscal year in which the expenditure is made; and (2) prior to their appropriation. 31 U.S.C. 1341(a)(1)(A) and (B). See, e.g., Ass'n of Civilian Technicians, Evergreen and Rainier Chapters, 57 FLRA 475, 483 (2001). However, nothing in this award requires the expenditure of funds for the payment of contract benefits in excess of, or prior to, the Agency's appropriation that covered these contract benefits. Moreover, based upon the clear wording of § 1341(a)(1)(A) and (B), there is no specific preclusion to an agency expending its appropriated money until apportionment, so long as it does not spend more money than that which is appropriated, i.e., over obligate. And in that regard, the Agency provides no evidence from which to conclude that the award required the Agency to over obligate any appropriation or apportionment. See 31 U.S.C § 1517 ("[a]n officer or employee of the United States Government . . . may not make or authorize an expenditure or obligation exceeding -- . . . an apportionment[.]" (emphasis added)).

      Moreover, the Agency does not establish that 31 U.S.C. § 1512(a) precludes an agency from obligating money prior to an apportionment. That statute states that "appropriation[s] available for obligation for a definite period shall be apportioned to prevent obligation or expenditure at a rate that would indicate a necessity for a deficiency or supplemental appropriation for the period". This requires the process of apportionment, but does not state that an agency which obligates appropriated funds prior to apportionment is in violation of the Antideficiency Act.

      Finally, in support of this argument, the Agency cites to Apportionment of Budget Authority for America West Airlines, B-290600 (July 10, 2002), in which the General Counsel for the Comptroller General stated that "[a]n agency may obligate an appropriation only after OMB has apportioned it to the agency." Id. (citing 31 U.S.C § 1512([a]), 1513(b); Exec. Order No. 6166 § (June 10, 1933)). The Agency, however, fails to explain, in light of this decision, how it was able to spend funds from February 20, 2003, to March 25, 2003, the day OMB apportioned its appropriation. In this respect, we note that the Agency even obligated funds for its contract benefits on March 21, 2003, four days prior to having OMB approve apportionment. Exceptions at 13. Accordingly, the Agency's argument that it was legally precluded from obligating its appropriation to pay for these programs and all other Agency operations until after OMB had apportioned the appropriation would mean that the Agency violated the Act by its expenditures of appropriated funds between February 20, 2003 and March 25, 2003, the date the Agency asserts these funds were apportioned. As the Agency has not explained how it could expend funds for these various purposes but not for the matters at issue here, and does not assert that all of its expenditures prior to March 25, 2003, also violated the Antideficiency Act, we are not persuaded that it was legally precluded from funding the programs as required by the contract. Therefore, the Agency has not established that the award is contrary to the Antideficiency Act.

2.     The Award Does Not Fail to Draw Its Essence From the Parties' Agreement

      In reviewing an arbitrator's interpretation of a collective bargaining agreement, the Statute provides that the Authority apply the deferential standard of review that Federal courts use in reviewing arbitration awards in the private sector. See 5 U.S.C § 7122(a)(2). Under this standard, the Authority will find that an arbitration award is deficient as failing to draw its essence from the collective bargaining agreement when the appealing party establishes that the award: (1) cannot in any rational way be derived from the agreement; (2) is so unfounded in reason and fact and so unconnected with the wording and purposes of the collective bargaining agreement as to manifest an infidelity to the obligation of the arbitrator; (3) does not represent a plausible interpretation of the agreement; or (4) evidences a manifest disregard of the agreement. See DOL, 34 FLRA at 575. The Authority and the courts defer to arbitrators in this context "because it is the arbitrator's construction of the agreement for which the parties have bargained." Id. at 576.

      The Arbitrator stated that, "Article 3, Section 9 . . . states that benefits deferred under a continuing resolution will be retroactively restored `[u]pon enactment of the Agency's appropriation, absent a determination by the General Counsel that such benefits will be curtailed under the above seriously impaired standard.'" Award at 41-42. Consistent with this interpretation, the Arbitrator determined that upon enactment of the Agency's appropriation, the Agency must restore contract benefits immediately or declare that to do so would seriously impair its ability to pursue its mission. Further, the Arbitrator noted that the parties' bargaining history indicated that the approval of the appropriation was the triggering event under this article, not some other action later in the budget process. Id at 42. Finally, as the Agency never made a "seriously impaired" declaration, the Arbitrator determined that it had no choice under the parties' agreement other than to immediately restore contract benefits. [ v61 p160 ]

      The Arbitrator's conclusion that the Agency must immediately fund these contract obligations in the absence of the Agency determining that to do so would "seriously impair" its budget, is rooted in the contract language and the parties' bargaining history. The fact that the contract language here, unlike the language in NLRB, 61 FLRA at 46, allows the Agency to evaluate its "budget considerations" in determining whether to fund these programs does not relieve it of its obligation to fund these programs in the absence of it declaring that it would be seriously impaired if it did so. As such, and noting again that it is the "arbitrator's construction of the agreement for which the parties have bargained," and not the Authority's, the Agency has failed to demonstrate that the Arbitrator's interpretation of Article 3, Section 9 is irrational, implausible, or in manifest disregard of that provision of the agreement. Accordingly, we deny the Agency's exception.

B.     The Deferral of Employee Performance Awards

1.     The Award is Not Contrary to Law

      When a party's exception challenges an arbitration award's consistency with law, rule, or regulation, the Authority reviews the questions of law raised in the exception and the arbitrator's award de novo. See NFFE, Local 1437, 53 FLRA at 1709. When applying a de novo standard of review, the Authority assesses whether an arbitrator's legal conclusions are consistent with the applicable standard of law, based on the underlying factual findings. Id. at 1710. In making that assessment, the Authority defers to the arbitrator's factual findings. See NTEU, Chapter 50, 54 FLRA at 253.

      Consistent with our previous analysis of the Antideficiency Act, we again note that a primary purpose of the Act is to prevent agencies from over obligating funds. 31 U.S.C § 1341. In this respect, the Agency has not shown that had it immediately funded its awards and contract benefit programs it would have over obligated any of its funds in violation of the Antideficiency Act. See, e.g., NLRB, 61 FLRA 41 (2005). Rather, as the Arbitrator noted, the Agency had an "escape hatch" in its contract that would allow it to avoid funding these programs if funding them would seriously impair its ability to perform its mission. Award at 43-44; See Article 3, Section 9. However, the Agency chose not to exercise this option. Id. at 10.

      With respect to the Agency's contention that the award violates its discretion to engage in contingency planning under the Antideficiency Act, the record does not support this assertion. The Agency cites to 31 U.S.C § 1512(c)(1)(A), which allows an agency to set aside a reserve fund to provide for contingencies. However, the Arbitrator's award does not stop the Agency from creating such a reserve fund, it simply requires the Agency to fund the programs established by Articles 7, 11 and 12 at the point of appropriation or else establish that the Agency would be "seriously impaired" by spending this money.

      Turning to the Agency's remaining argument, that the "action by the General Counsel and the Board members to sequester funds until such time as the issue of the recission was determined is consistent with both the [Employee Recognition Program] and the Office of Personnel Management government-wide regulation," this assertion does not establish that the Arbitrator's award is contrary to either. To the contrary, the C.F.R provision sets forth no independent obligations upon the Agency, it mandates only that the funding of an agency awards program must be consistent with applicable agency financial management controls and delegations of authority. Additionally, to the extent that the Employee Recognition Program (ERP) is an Agency regulation, the parties' agreement governs. See, e.g., AFGE, Local 2408, 58 FLRA 608, 610 (2003) (collective bargaining agreement, and not agency regulations, govern the disposition of matters to which they both apply). Therefore, as the Agency has not established that the award is contrary to any of these "applicable financial management controls and delegations of authority" the award is not contrary to this C.F.R. provision or the ERP.

2.     The Award Does Not Impermissibly Conflict With the Agency's Right to Assign Work

      When resolving an exception alleging that an award violates management's rights under § 7106 of the Statute, the Authority first determines whether the award affects a management right under § 7106(a). See United States Small Bus. Admin., 55 FLRA at 184. If it does, then the Authority applies the framework established in BEP, 53 FLRA at 151-53.

      Upon finding that an award affects a management right, the Authority applies a two-prong test to determine if the award is deficient. BEP, 53 FLRA at 152-53. Under prong I, the Authority examines whether the award provides a remedy for a violation of either an applicable law, within the meaning of § 7106(a)(2) of the Statute, or a provision in the agreement that was negotiated pursuant to § 7106(b) of the Statute. Id. at 153. Under prong II, the Authority considers whether the arbitrator's remedy reflects a reconstruction of what management would have done if it had not violated the law or provision in the agreement at [ v61 p161 ] issue. Id. at 154. An award that fails to satisfy either prong I or prong II will be set aside, modified, or remanded as appropriate to the parties. Id.

      The Agency argues that Article 12, as interpreted and applied by the Arbitrator affects its right to assign work. In this respect, the right to assign work under § 7106(a)(2)(B) of the Statute encompasses the right to determine the particular duties to be assigned, when work assignments will occur, and to whom or what position the duties will be assigned. See AFGE, Local 3529, 56 FLRA 1049, 1050 (2001); AFGE, Local 1985, 55 FLRA 1145, 1148 (1999). Proposals which require the assignment of specific duties to identified individuals, including management officials, affect management's right to assign work under § 7106(a)(2)(B) of the Statute. See AFGE, Local 1923, 44 FLRA 1405, 1428 (1992). Moreover, the Authority has found that proposals which would require certain management officials to perform specific tasks affect the right to assign work. See Patent Office Prof'l Ass'n, 47 FLRA 10, 23 (1993) (POPA). Finally, the right to assign work also includes the right not to assign work. See NAGE, Local R12-33, 40 FLRA 479, 486 (1991).

      However, as the Authority has noted, § 7106(b) is an exception to § 7106(a). See United States Dep't of Commerce, Patent & Trademark Office, 54 FLRA 360, 374 (1998) (quoting Ass'n of Civilian Technicians, Montana Air Chapter, No. 29 v. FLRA, 22 F.3d 1150, 1155 (D.C. Cir. 1994)). More specifically, the Authority has stated that nothing in § 7106 shall preclude the parties from negotiating, under § 7106(b)(2), procedures which management officials will follow in exercising the rights enumerated in § 7106(a). See, e.g., AFGE, Local 2761, 32 FLRA 1006, 1014-16 (1988) (Local 2761). Consistent with this view of § 7106, the Authority has further stated that, because many procedures require for their implementation the assignment of particular tasks to agency personnel, "[t]o bar negotiation of procedures that would otherwise be negotiable under § 7106(b)(2) because they entail" such an assignment of tasks "would nullify § 7106(b)(2)[.]" NFFE, Local 2099, 35 FLRA 362, 368 (1990) (Local 2099). Thus, the Authority has held that procedural proposals that are negotiable under § 7106(b)(2) and that require supervisors to perform some task in the implementation of the procedure are within the duty to bargain. See, e.g., Patent Office Prof'l Ass'n, 47 FLRA 954, 959 (1993) ("otherwise negotiable procedures entailing some assignment of work to employees or management officials do not necessarily directly interfere with an agency's right to assign work.") NTEU, 46 FLRA 696, 746 (1992); AFGE, AFL-CIO, Local 446, 43 FLRA 836, 844-46 (1991).

      Here, the Arbitrator determined that under Article 12 of the parties' agreement, the Agency breached a "procedure" when it did not meet its obligation to have performance awards forwarded shortly after their preparation to headquarters by directing "Regional Managers not to sign or forward performance award papers to headquarters." Award at 50. Authority precedent, which is not challenged by the Agency, supports the Arbitrator's determination. See, e.g., POPA, 47 FLRA at 30 (establishing a time limit in which management must meet with employees to discuss substantive changes to performance appraisal plans was found to be a procedure); Local 2761, 32 FLRA at 1015 (setting time limit for providing employee performance appraisals a procedure). Accordingly, we find that the disputed portions of Article 12 constitute a negotiable procedure that is enforceable under § 7106(b)(2) of the Statute. Therefore, as the award provides a remedy for a provision in the agreement that was negotiated pursuant to § 7106(b)(2) of the Statute, and the Agency does not otherwise argue that the award violates prong II of BEP, the award is not contrary to law. See, e.g., United States Dep't of Justice, Federal Bureau of Prisons, Federal Transfer Center, Oklahoma City, Ok., 57 FLRA 158, 160 (2001) (Chairman Cabaniss dissenting as to other matters) ("[t]he Agency does not argue that the award fails to satisfy prong II of BEP. Consequently, we do not address prong II.")

3.     The Award Does Not Impermissibly Conflict with the Agency's Right to Determine Its Budget

      The Authority's test for determining whether a proposal affects management's right to determine its budget under § 7106(a)(1) of the Statute is set forth in AFGE, AFL-CIO, 2 FLRA 604 (1980), enforced as to other matters, 659 F.2d 1140 (D.C. Cir. 1981), cert. denied, 455 U.S. 945 (1982) (Wright-Patterson). See also, NAGE, 48 FLRA at 1202-08; NTEU, 47 FLRA 980, 996-998 (1993) (second part of the budget test set forth in Wright-Patterson refined).

Under the Wright-Patterson test, if a proposal prescribes either the particular programs to be included in the agency's budget, or the amount to be allocated in the budget, the proposal would affect the agency's right to determine its budget. Alternatively, if the agency makes a substantial demonstration that an increase in costs is significant and unavoidable and is not offset by compensating benefits, the Authority will find that [ v61 p162 ] the proposal affects the agency's right to determine its budget.

United States Dep't of the Treasury, United States Customs Serv., El Paso, Tex., 55 FLRA 553, 557-58 (1999).

      Applying the first part of the Wright-Patterson test, the Agency contends that the Arbitrator's award will require the Agency to "fund specific line items for contract benefits and awards in its Operating Plan for future fiscal years." Exceptions at 26. However, the Arbitrator's award does not prescribe a program, operation or dollar amount to be included in the Agency's budget with respect to the payment of performance awards or contract benefits. Rather, as written, the award merely directs the Agency to comply with the terms of the parties' contract by not unnecessarily deferring funding for these programs. The Award does not, however, specifically direct the Agency to fund these programs indefinitely. Award at 56, 60-61.

      Moreover, the Agency argues generally that it will be compelled to set aside $110,000 in its operating plan for Article 7 training based on the Arbitrator's remedy. Despite the Agency's assertions, and as noted above, the Arbitrator's remedy does not specifically require the Agency to fund these programs in the future. Award at 60-61. In that regard, the Arbitrator reiterated that the Agency may, where applicable, invoke its "seriously impair[ed]" standard at its discretion and thus not fund the awards program without violating the parties' agreement with respect to deferrals. Id. at 58. Therefore, as the Agency has not shown that the award affects its right to determine its budget under the first part of the Wright-Patterson test, and the Agency does not otherwise contend that the award affects its budget under the second part of the test, we find that the award does not affect the Agency's right to determine its budget. See also, NLRB, 60 FLRA 41 (2005).

4.      The Award Does Not Fail to Draw Its Essence from the Parties' Agreement

      The Arbitrator determined that based on the language of Article 12, Section 3(b)(1) and 3(b)(2), the Agency "undermined the language of Article 12" when the Acting General Counsel directed regional managers not to sign or forward performance award papers to headquarters. Award at 50. The Agency correctly notes that Article 12, Section 3(b)(1) applies to incentive awards. However, Article 12, Section 3(b)(1) above requires expeditious processing of awards for employees who merit an award based on "contributions and/or performance." Award at 6. Moreover, we note that Article 12, Section 3(b)(2) is silent as to how quickly performance awards should be processed. Accordingly, the Arbitrator's interpretation of this section as requiring regional directors to sign and forward these appraisals "shortly" after the performance award papers were ready for those employees who had already been identified as meriting a performance award, is not irrational, implausible, or in manifest disregard of that provision of the agreement. [n5]  Award at 50. Therefore, we deny the Agency's exception. [n6] 

5.     The Award is Not Contrary to the Back Pay Act

      An award is deficient under § 7122(a)(1) of the Statute if it is contrary to the Back Pay Act. See, e.g., United States Dep't of Justice, Fed. Bureau of Prisons, Fed. Corr. Complex, Beaumont, Tex., 59 FLRA 466, 467 (2003). The Authority has long held that, under the Back Pay Act, an award of backpay is authorized only when an arbitrator finds that: (1) the aggrieved employee was affected by an unjustified or unwarranted personnel action; and (2) the personnel action has resulted in the withdrawal or reduction of the grievant's pay, allowances, or differentials. See, e.g., United States Dep't of Health and Human Servs., 54 FLRA 1210, 1218-19 (1998) (HHS).

      A violation of a collective bargaining agreement provision constitutes an unjustified or unwarranted personnel action. See AFGE, Local 916, 57 FLRA 715, 717 (2002) (citing United States Dep't of Defense, Dep't of Defense Dependents Schools, 54 FLRA 773, 785 (1998)). Moreover, the Authority has previously determined that "performance awards required by a collective bargaining agreement that are improperly withheld from bargaining unit employees constitute `pay, allowances, or differentials, within the meaning of the Act, and the agency's failure to pay them as required by the agreement constitutes the `withdrawal or reduction' of those benefits." Fed. Aviation Admin., 55 FLRA 1271, 1276 n.9, (2000) (FAA). [ v61 p163 ]

      Here, the Arbitrator determined that the Agency violated Article 12 of the parties' agreement when it did not process performance awards in a timely manner. As such, the Agency's conduct constitutes an unjustified or unwarranted personnel action.

      Additionally, the Arbitrator determined that the personnel action resulted, in the improper withholding of performance awards for some employees. [n7]  Accordingly, to the extent that employee performance awards were improperly withheld, as we determined above in FAA, the award demonstrates that employees suffered a withdrawal or reduction of those benefits. See, e.g., Pueblo Depot Activity, Pueblo, Colo., 50 FLRA 310, 311-12 (1995) (award of back pay appropriate upon determining which employees were affected); United States Dep't of the Army, Aviation Applied Technology Directorate, Fort Eustis, Va., 38 FLRA 362, 367 (1990) (allowing for modification of a Back Pay award where it could be determined which employee was eligible for Back Pay.) As such, the award is not contrary to the Back Pay Act. HHS, 54 FLRA at 1218-19.

V. Decision

      The Agency's Exceptions are denied.


Appendix

Article 3, Section 9

In the event budgetary considerations seriously impair the Agency's ability effectively to achieve the mission and goals of the National Labor Relations Act, the General Counsel will not be obligated to implement or continue a benefit of this Agreement which is expressly contingent on such considerations.
. . . .
Upon enactment of the Agency's annual appropriation, absent a determination by the General Counsel that such deferred benefits will be curtailed under the above "seriously impaired" standard, the deferred benefits will be retroactively restored to the greatest extent possible, consistent with law. (footnote omitted).

Article 4, Section 7

Employees will not be subject to arbitrary or unreasonable acts by a management office or supervisor which would otherwise be grievable under Article 15 (Grievance Procedure), Section 2. No action will be taken against an employee for violating a policy, procedure, rule or regulation which he or she did not know or reasonably could not have known existed.

Article 11, Section 1

Consistent with budgetary and staffing considerations, a minimum of 13 Washington Exchange Program assignments will be offered to employees during each fiscal year of this Agreement. The purpose of this program is to further the experience of the employees in various facets of the Agency's legal and quasilegal activities, and to provide opportunities to utilize training resources in headquarters, both as an aid in assisting them to achieve full potential for career development and to help them make the maximum contribution to the Agency's mission.

     Section 4

All applicants for the program will be notified by 30 days after the Agency receives its annual appropriation or December 15, whichever occurs first as to who was selected and, if selected, the appropriate time when they will be participating in the program. [ v61 p164 ]

Article 12, Section 1

General. Consistent with applicable law, government wide rule and regulation, budgetary considerations, and this Agreement, the General Counsel shall continue to encourage all employees to share actively in improving Government operations and shall recognize and reward employees appropriately and promptly for their contributions and performance.

Section 2. Types of Awards

(a) Incentive Awards

(1) Employee contributions such as meritorious suggestions, special acts or services, and other superior accomplishments may be recognized and rewarded with an incentive award consisting of cash or time-off. Such awards are not dependent upon any certain performance standard ratings except for bilingual awards as set forth in Section 2(a).

. . . .

(3) Funds for cash incentive awards, including awards for special acts or services, meritorious suggestions, and other superior accomplishments shall be separate from the performance awards fund,

. . . .

(5) Incentive awards may be granted alone or in addition to a performance award (including a quality step increase).

(6) As part of the Agency's Employee Recognition Program under this Section, any employee or the NLRBU, may nominate in writing, employee(s) for such awards through the appropriate supervisory channels.

(b) Performance Awards. Employees with performance standard ratings of "Fully Successful" or higher in all critical elements are eligible for a performance award. To be eligible for a quality step increase, employees must have a rating of record of "Outstanding."

Section 3(a) It shall be the responsibility of management to continuously be aware of employee contributions and/or performance, and whether based on such contributions and/or performance an employee is eligible for an incentive or performance award.

(b)(1) Whenever regional management identifies employees or groups of employees whose contributions and/or performance merit an incentive award, it shall, as expeditiously as possible, make a determination as to whether to recommend the employee(s) for an appropriate award.

(2) Whether a Regional Director executes a written determination that an employee has been granted a performance award based on his or her performance and current rating of record, the Regional Director shall forward the determination to the Division of Operations-Management and simultaneously advise the employee. The performance award is effective as of the date of the written determination by the Regional Director or the effective date of the appraisal, whichever is later.

(c) Recommendations for incentive and/or performance awards will be granted or denied within a reasonable period of time after a fully supported recommendation has been submitted to the approving official. The Agency will advise the employee within a reasonable period of time of final action with regard to his or her award recommendation.

      Section 4. In recognition of the General Counsel's policy to encourage the successful settlement of cases, an employee's extraordinary and outstanding case settlement record may serve as a factor in support of a nomination or recommendations for an incentive award.

      Section 5. The names of employee recipients of incentive awards including bilingual awards, and performance awards including quality within-grade increases, will be periodically published in the Agency newsletter or other writing.

      Section 6. General Counsel will provide the NLRBU with a monthly report of performance awards, including quality step increases, and incentive awards including bilingual awards granted to employees.

Award at 3-6


File 1: Authority's Decision in 61 FLRA No. 31
File 2: Opinion of Member Armendariz


Footnote # 1 for 61 FLRA No. 31 - Authority's Decision

   Member Armendariz' dissenting opinion appears at the end of this decision.


Footnote # 2 for 61 FLRA No. 31 - Authority's Decision

   The Authority recently issued a decision dealing with similar issues in NLRB, Washington, D.C., 61 FLRA 41 (2005) (NLRB).


Footnote # 3 for 61 FLRA No. 31 - Authority's Decision

   The grievance pertains to two master agreements, one representing the interests of professional field employees and one representing the interests of support staff field employees. Agency Exhibit 3, 4. For the purposes of resolving this matter, however, the language in these agreements are virtually identical.


Footnote # 4 for 61 FLRA No. 31 - Authority's Decision

   Pertinent portions of these contract provisions can be found in the appendix at the end of this decision.


Footnote # 5 for 61 FLRA No. 31 - Authority's Decision

   The Agency, as part of its essence exception, also contends that the Arbitrator relied upon a non-fact because "the Arbitrator failed to find any instances where, once a Regional Director executed a determination that an employee was granted a performance award, that determination was not forwarded to Operations Management." Exceptions at 29. To the extent we were to construe this as argument as a nonfact exception, we would deny it. In this respect, what occurred after these performance recommendations were signed by the regional directors is not a central fact. United States Dep't of the Air Force, Lowry Air Force Base, Denver, Colo.,48 FLRA 589, 593 (1993).


Footnote # 6 for 61 FLRA No. 31 - Authority's Decision

   In light of denying the Agency's essence exceptions, we need not address the Union's § 2429.5 argument. Opposition a